ERISA plan sponsors may be liable for breach of fiduciary duty if the investments selected for an employee retirement plan are “objectively imprudent.” A decision last week by the Eleventh Circuit makes a defendant’s path for obtaining summary judgment on such a claim more difficult. In Johnson v. Russell Investment Mgt., LLC, 2026 WL 2387006 (11th Cir. August 17, 2026), the court held that summary judgment for the defendant employer, Royal Caribbean Cruises Ltd., was improper, because an ERISA plaintiff need not identify an apples-to-apples comparison to establish the required objective imprudence in every case.
The plaintiff, on behalf of the class, alleged that Royal Caribbean’s decision to replace one “target date fund” with another such fund caused the class members’ investment losses. A target date fund is a vehicle that allows investors to invest all their savings in a single diversified fund that changes its asset allocation over time based on a target retirement date. As retirement approaches, the fund adjusts its asset allocation to become more conservative.
During a restructuring of its retirement plan, Royal Caribbean decided to replace a Vanguard TDF with a Russell TDF. The plaintiff alleged that this was a very bad decision from an investment standpoint for a number of reasons. After four years of disappointing performance, Royal Caribbean removed the Russell TDF from its investment menu. The plaintiff sued, alleging that the fund’s underperformance and high fees relative to other TDFs demonstrated that it was an objectively imprudent investment. The district court eventually granted the defendants’ motion for summary judgment, reasoning that an ERISA plaintiff must identify comparator funds to establish objective imprudence through an “apples-to-apples” comparison. The plaintiff appealed, and settled with Russell during the appeal.
Judge Andrew Brasher’s opinion for the Court held that a plaintiff is not necessarily required to identify a comparable investment to establish the requisite loss causation for an objective imprudence claim. The objective imprudence of an individual investment turns on whether it falls “outside the range of reasonable judgments a fiduciary may make based on her experience and expertise.” Comparator evidence may be relevant to this inquiry, but the court held that it was not always necessary.
The relevant facts, the court pointed out, may vary from case to case. A challenged investment “must be assessed against the actions of a hypothetical prudent fiduciary with like aims,” quoting its prior decision in Pizarro v. Home Depot, Inc., 111 F.4th 1165 (11th Cir. 2024).
The court noted that its approach to comparator evidence is consistent with those of the two other circuits to consider the question, the Sixth and Third. The court closed with an admonition that it made no determination about whether the record warranted summary judgment under the appropriate standard on remand.